Government to Revise Fixed Costs for Urea Manufacturers After 25 Years

After 25 years, the government plans to revise fixed cost payments to 30 gas-based urea manufacturers by year-end. Secretary Rajat Kumar Mishra addresses cost concerns. Factors like salaries and plant maintenance remain unchanged since 2000. The revision aims to sustain operations and catalyze future investments.

The government is set to revise fixed cost payments for 30 gas-based urea manufacturers by the end of the year, according to Fertilisers Secretary Rajat Kumar Mishra. The decision aims to address industry concerns about stagnant costs, which have not been updated for nearly 25 years.

Fixed costs, covering expenses such as working capital requirements, salaries, and plant maintenance, have remained consistent since 2000, despite significant inflation. Speaking at a Fertiliser Association of India event, Mishra stated the revision decision wouldn't require cabinet approval but would occur at the ministry level.

The government's considerations include whether the increased costs will start from April 1, 2025, or restore the Rs 2,300 per tonne minimum cost floor from April 1, 2014. FAI Chairman S Shankarsubramanian emphasized the importance of timely cost revisions for sustaining operations and attracting future investments.

(With inputs from agencies.)